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key hires

Recruitment is a great indicator of the wider health of the economy. And economists, as in other disciplines, often attempt to predict the future by learning from the mistakes of the past.

So, what do they have to say about the state of the UK economy? In the US, economic activity has recovered to pre-Great Recession levels and unemployment is falling robustly, while sadly the same cannot be said for the UK. Why is this?

The Nobel Prize-winning economist Paul Krugman notes that the US has not (as yet) bothered with austerity at all – and yet, somehow, its deficit has fallen by 25%, and businesses are hiring again. How did this happen? Largely, Krugman notes, it happened thanks to a growing economy and the increased tax revenue this generated.

In the UK, we are repeating the mistakes of the 1930′s by cutting back during an economic slump, at a time when the economy actually needs a kick-start. Our deficit grew larger last year in spite of (or perhaps because of) austerity. If the current indicators are correct, then our economy is poised to enter an unprecedented Triple Dip recession. Welcome to 2013.

It is against this rather dark background that we must frame our thinking with regard to the trends we’re likely to see in recruitment in 2013.

Many organisations are sitting on large cash piles, and credit is becoming cheaper, but a chronic lack of demand is preventing investment (and hiring). Millions of people are unemployed, or under-employed and seeking full-time employment.

At least, that’s one half of the story. The other is that, at the highly skilled end, the labour market has become far less ‘liquid’ as people sit tight on the job they have, motivated by fear of loss. What are the implications of this?

On the one hand, a business may be inundated with thousands of responses for jobs in retail, customer services, and administration. The paradox is that as businesses have hired less, so the time they must invest in recruitment has often increased – handling very high response levels professionally and appropriately can be a daunting and time-consuming prospect.

The other side of the same coin is that at the highly-skilled end, while volumes are lower, it is critically important to make the right hires – and there may be a tangible impact on business performance as a result. In a challenging economy, having the right people on board could mean the difference between profit and loss.

With this in mind, there is likely to be a continued and heightened focus in 2013 on the following key recruitment themes:

1.Response handling and screening – particularly at the graduate and junior operational end, what is the best way to handle thousands of responses?

2.Robust assessment of key hires – those hires that are made, need to be the right ones

3. The link between recruitment and development – acquisition of talent is one side of the coin, retention and development the other, and the synergy of both is critical.

As 2013 develops, the hope is that the current economic indicators are wrong. But if they’re not, and we enter yet another recession, then we are at least able to learn from our experiences of hiring in 2009-2012.

The storm has yet to pass, but our ability to predict and handle its consequences are much improved.